Since the 1990s, at least 37 countries have either introduced or expanded their screening of investments on national security grounds. With the passage of the Significant Investments Review Bill (SIB) in Parliament on Jan 9, Singapore will join the list. National security concerns have intensified, especially since the Covid-19 pandemic in 2020 and then the Russia-Ukraine war, which led to interruptions in the supplies of essential goods such as medical equipment, food and energy. Rising geopolitical tensions have also heightened concerns about inward investments being driven by political rather than commercial considerations to get access to critical technologies.

It is only prudent for Singapore to step up its vigilance in regard to such investments to protect its most strategic assets. The law that has been passed is expansive in scope, covering not only foreign but also local investments. Going beyond sector-based regulation, it will identify certain “designated entities”, which include companies whose activities are considered critical to national security, but this can also be extended to other entities. It empowers the Government to review transactions relating to changes in ownership and control above certain shareholding thresholds. The Government will also have the right to unwind investments and to vet appointments of senior executives such as the chief executive and board members in certain cases.